TeamMate Webinar

Walking the Talk: Rethinking Value Creation for

Internal Audit
30 April 2021

Visit www.TeamMateSolutions.com
for the latest in Internal Audit thought leadership and more.
Phil Leifermann MBA, CIA, CCSA, CFSA, CGAP, CRMA, CISA, CFE
▪ Business Development Director, Wolters Kluwer
TeamMate Asia Pacific

▪ 34 years of management assurance experience

throughout the Asia Pacific region

▪ Master of Business Administration, Bachelor of Business

majoring in accounting and information system and
professional certifications from IIA, ISACA and ACFE

Slide 2
Agenda

1 Introduction

2 Organization’s Value Creation Lifecycle

3 Internal Audit’s Value Proposition

4 “Value Added” Internal Audits

5 Conclusion

6 Q&A

Slide 3
Introduction

1 Introduction

2 Organization’s Value Creation Lifecycle

3 Internal Audit’s Value Proposition

4 “Value Added” Internal Audits

5 Conclusion

6 Q&A

Slide 4
Introduction
IIA Definition of Internal Audit

▪ Internal auditing is an independent, objective assurance and consulting activity

designed to add value to and improve an organization's operations. It helps an
organization accomplish its objectives by bringing a systematic, disciplined approach
to evaluate and improve the effectiveness of governance, risk management and
control processes.

Slide 5
Introduction
I’m the internal auditor,
I’m here to add value!

Slide 6
Introduction

What is Value?

Slide 7
Introduction

If we maintain the amount of value, have we added value?

Slide 8
Introduction

✓
If we help to increase the amount of value, have we added value?

Slide 9
Introduction


If we help to not decrease the amount of value, have we added value?

Slide 10
Introduction

Value Creation vs. Value Preservation

Slide 11
Introduction

Slide 12
Organization’s Value Creation Lifecycle

1 Introduction

2 Organization’s Value Creation Lifecycle

3 Internal Audit’s Value Proposition

4 “Value Added” Internal Audits

5 Conclusion

6 Q&A

Slide 13
Value Creation Lifecycle

Defining Value

Sustaining Value Value Creation Lifecycle Creating Value

Delivering Value

Slide 14
Value Creation Lifecycle
Defining Value
Defining Value

Sustaining Value Value Creation Lifecycle Creating Value

Delivering Value

Slide 15
Value Creation Lifecycle
Defining Value

▪ We must identify our stakeholders

▪ Then, we must we can engage with these stakeholders to determine:

✓ How they define value

✓ Their priorities for value based upon the opportunities and threats faced by
organization

✓ How these priorities change over short, medium and long terms

Slide 16
Value Creation Lifecycle
Creating Value
Defining Value

Sustaining Value Value Creation Lifecycle Creating Value

Delivering Value

Slide 17
Value Creation Lifecycle
Creating Value

▪ This depends upon the goals, objectives, strategy and business model for
organization, including:

✓ Inputs, or resources available to organization

✓ Activities which add value for organization

✓ Outputs, or products and/or services produced by organization

✓ Related outcomes

Slide 18
Value Creation Lifecycle
Delivering Value
Defining Value

Sustaining Value Value Creation Lifecycle Creating Value

Delivering Value

Slide 19
Value Creation Lifecycle
Delivering Value

▪ How value is delivered to customers and society through responsible and profitable
products and services

▪ This involves leveraging tangible and intangible assets to deliver value in effective
and efficient ways

▪ It also involves delivering value at appropriate price, place and level of performance

Slide 20
Value Creation Lifecycle
Sustaining Value
Defining Value

Sustaining Value Value Creation Lifecycle Creating Value

Delivering Value

Slide 21
Value Creation Lifecycle
Sustaining Value

▪ Like any important initiative in your organization, value creation isn’t one-off
process, it requires ongoing time and effort to ensure that you continue enjoying
related benefits

▪ Today, organizations are dynamic, and opportunities and threats faced by

organization are continually changing, and we must similarly reassess this process

Slide 22
Internal Audit’s Value Proposition

1 Introduction

2 Organization’s Value Creation Lifecycle

3 Internal Audit’s Value Proposition

4 “Value Added” Internal Audits

5 Conclusion

6 Q&A

Slide 23
Internal Audit’s Value Proposition
▪ Not audit charter

▪ Not audit methodology

▪ Not 5-year strategic plan

▪ Not annual audit plan

▪ Not audit plan for each audit

Slide 24
Internal Audit’s Value Proposition
▪ Audit charter

▪ Value proposition

▪ Audit methodology

▪ 5-year strategic plan

▪ Annual audit plan

▪ Audit plan for each audit

Slide 25
Internal Audit’s Value Proposition

Prepare Discuss Approve Endorse

Internal Audit Management

Slide 26
Internal Audit’s Value Proposition

Prepare Discuss Approve Endorse

Internal Audit Management

Slide 27
Internal Audit’s Value Proposition

Prepare Discuss Approve Endorse

Internal Audit Management

Alignment

Slide 28
Internal Audit’s Value Proposition
▪ Philosophy – guiding principles for behavior

▪ Initiatives – behavior itself, i.e. audit methodology

Slide 29
Internal Audit’s Value Proposition
Continuous Risk Assessment / Data Driven Risk Assessment

2020

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Data Driven Risk Assessments

Audit Plan/Schedule
Audit Plan/Schedule

Slide 30
Internal Audit’s Value Proposition
Sub-audit 1 Sub-audit 2

Review Review

Fieldwork
Fieldwork

Reporting
Reporting

Planning Planning

Slide 31
Internal Audit’s Value Proposition
Combined Assurance
Internal Audit

Combined Assurance

Risk
Compliance
Management

Slide 32
“Value” Adding Internal Audits

1 Introduction

2 Organization’s Value Creation Lifecycle

3 Internal Audit’s Value Proposition

4 “Value Added” Internal Audits

5 Conclusion

6 Q&A

Slide 33
“Value” Adding Internal Audits
Value Alignment

Management Value Internal Audit Value

Slide 34
“Value” Adding Internal Audits
Value Alignment

Management Organization Value Internal Audit

Slide 35
“Value” Adding Internal Audits
Value Alignment

Management Organization Value Internal Audit

Alignment

Slide 36
“Value” Adding Internal Audits
Value Alignment

Internal Audit
Future

Present

Stakeholders
Past

Slide 37
“Value” Adding Internal Audits
Value Alignment

Internal Audit
Strategic Activities
Stakeholders

Operational Activities

Financial Activities

Compliance Activities

Slide 38
“Value” Adding Internal Audits
Value Rating

▪ When we conduct internal audit, we won’t add value (at least any significant value)
just by conducting this audit

▪ We need specific plan for how we will add value (hopefully significant value) on this
audit – this needs to be carefully considered during planning phase

▪ We also need to understand that every audit won’t add same amount of value, and
some audits might not add any value

▪ So, again this comes back to perceptions and alignment

Slide 39
“Value” Adding Internal Audits
Value Rating

▪ High value audit

▪ Low value audit

▪ No value audit

Slide 40
“Value Adding” Internal Audits
Value Proposition Canvas

Gain Creators Gains

Service Jobs

Pain Relievers Pains

Slide 41
Conclusion

1 Introduction

2 Organization’s Value Creation Lifecycle

3 Internal Audit’s Value Proposition

4 “Value Added” Internal Audits

5 Conclusion

6 Q&A

Slide 42
Conclusion
Theory

1. Understand the organization’s value creation lifecycle

2. Prepared internal audit’s value proposition

Practice

3. Conducting value adding internal audits

Slide 43
Conclusion
▪ Obsess about value we deliver

▪ Communicate incessantly about value we deliver

▪ Don’t be afraid to market

▪ Understand what makes stakeholders tick

▪ Seek feedback and adjust

Slide 44
Conclusion

Slide 45
Conclusion
Muhammad Ali

1. I am the greatest, I said that even before I knew I was.

2. I figured that if I said it enough, I would convince the world that I really was
the greatest.

3. It's hard to be humble, when you're as great as I am.

4. It's not bragging if you can back it up.

Slide 46
Q&A

1 Introduction

2 Organization’s Value Creation Lifecycle

3 Internal Audit’s Value Proposition

4 “Value Added” Internal Audits

5 Conclusion

6 Q&A

Slide 47
Questions?

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#AuditEvolution @PhilLeifermann
Cell/mobile: +61 488 765 711
Email: phil.leifermann@wolterskluwer.com

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Thank you!

Visit www.TeamMateSolutions.com
for the latest in Internal Audit thought leadership and more.